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| | Interest Rate Rise Not to Impact Consumption: Economist |
 | | Though basic economics also says that a rise in interest rate may have substitution effect, which encourages people to spend less and save more, it does not apply to China as historical data show that domestic consumption growth is not sensitive to interest rates, said Qu. |
 | | Since 1996, the People's Bank of China has lowered the one-year benchmark deposit rate from 11 percent to 2 percent. |
 | | Meanwhile, as the Chinese government is taking steps, such as tighter monetary policies, to cool the economy, bank lending may slow, which will create asset quality problems at commercial lenders, said Moody's Investors Service in a report. |
| www.china.org.cn /english/BAT/94951.htm (379 words) |
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